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Your project exceeded costs in the past caused by an underestimation of resource costs in the cost baseline: PV: $1,200,000, EV: $1,000,000, AC: $1,200,000 You expect the underestimation to influence the future as much as it did in the past. If the BTC (Budget to complete) is at $1,000,000, what should be your new EAC (Estimate at Completion)?
Correct Answer: B
What is always true, no matter whether typical changes, atypical changes or new estimate: EAC = AC + ETC. The ETC formula differs (ETC1 = BAC - EV; ETC2 = (BAC-EV)/CPI), but the past (actual costs) will not differ. Prove it using the formulas: ETC2 = (BAC - EV)/CPI BAC = ETC2*CPI + EV. Put that to EAC2 = BAC/CPI makes EAC2 = (ETC2*CPI + EV)/CPI EAC2 = ETC2 + EV/CPI .... put in CPI = EV/AC EAC2 = ETC2 + EV/(EV/AC) EAC2 = ETC2 + AC. EAC2= 1.000 + 1.200 = 2.200